30 SECOND GUIDE: ENERGY FROM WASTE

The Daily Mail City team explains this method of electricity production which Viridor is spending big on.

How does that work?

When things degrade, they produce gas. That doesn’t sound very impressive, but on an industrial scale the numbers add up and you could start producing a serious amount of power if you captured the gas from landfill and used it.

Money for nothing: Viridor receives 200 truck loads of waste weighing 2100 metric tonnes a day - and it produces a lot of gas as it degrades, which the firm can sell

How much are we talking about?

Viridor, the waste management arm of Pennon, reckons 6 per cent of the UK’s electricity needs could be met by the technology.

It is spending £1.5billion on building eight plants hoping to tap into the growing demand as Britain’s coal generators shut down.

As division chief Colin Drummond puts it: ‘We’re sleepwalking into an energy crisis in the UK’.

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‘Viridor had predicted a price fall but the scale of it, particularly in the second and third quarters of the financial year, was even greater than the company had expected,’ the group said in its annual results yesterday.

It was forced to wipe £140million from the value of Viridor, which pushed Pennon’s annual profits 89 per cent lower to £21.8million.

Rivals must be pleased

South West Water, also owned by Pennon, performed well. Profits rose 7.5 per cent to £152million and if the company’s write-down was excluded, group profits only fell 1.1 per cent to £198million.

Peer United Utilities saw its profits rise 9 per cent to £305million after increases in water prices saw its sales rise to £1.6billion.